Mexico Senate committee OK's air transport deal with United States

MEXICO CITY, April 21 (Reuters) - A key committee in
Mexico's Senate on Thursday ratified a deal with the United
States that would boost competition in air transportation, a
Senate spokesman said, paving the way for expansion of the
world's second largest cross-border market.

The deal, which both governments have already signed and
modifies a 1960 agreement, would open up new routes for airlines
to fly between the countries and allow for an unlimited number
of flights.

Mexico's full Senate must still ratify the agreement for it
to take effect, which is likely to happen in the coming days.

While some analysts have welcomed the deal, saying it would
lower airfares by boosting traffic, Mexican airline workers have
complained it would put the country's airlines at a
disadvantage.

The United States, which has a fleet of 7,500 planes
compared to Mexico's 300, accounts for 65 percent of total
flights in Mexican airspace, well above the 22 percent offered
by Mexican carriers.

Ratification would also remove the main hurdle to a closer
tie-up between Delta Air Lines Inc and Grupo Aeromexico
SAB de CV. The carriers have asked the U.S.
government to grant them immunity from antitrust law so they can
coordinate better flight connection times as well as prices, a
request that cannot be granted until the aviation accord comes
into force.

Delta said last week its deal to buy up to 49 percent of
Aeromexico is expected to close this summer.
(Reporting by Dave Graham and Veronica Gomez; Additional
reporting by Jeffrey Dastin in New York; Writing by Alexandra
Alper; Editing by James Dalgleish)